Cancer drugs, Tamiflu lift Roche quarter sales

A SPIKE in US demand for flu drug Tamiflu and strong sales of mainstay cancer medicines lifted first-quarter sales at Roche Holding by a bigger than expected 5%.

The healthy performance in its main pharmaceuticals unit — which was also bolstered by approval of two new breast cancer drugs — offset weak sales in diagnostics, and the Swiss group confirmed its forecast of rising sales and profit for this year.

The world’s largest maker of cancer drugs said quarterly sales rose to Sf11.59bn ($12.44bn) compared with the average analyst forecast of Sf11.45bn in a Reuters poll.

Analysts at Jefferies and Sarasin said it was a good set of numbers, although diagnostics were once again disappointing.

Roche stock rose 0.3% yesterday. Sales in the smaller diagnostics business were up just 1% in the quarter, with diabetes care down 5% due to stiff competition and pricing pressure.

Demand for Tamiflu — a smaller seller than Roche’s cancer blockbusters — accounted for half the rise in the pharma division, with sales surging 84% in the quarter following a severe flu season in the US.

CE Severin Schwan said the bumper Tamiflu sales would not last and demand had already tapered off since the end of February. But he was “confident” of meeting the company’s full-year targets.

“The Roche group is off to a good start in 2013,” he told reporters yesterday, adding that the company would continue to look for bolt-on acquisitions of interesting products and technologies.

Roche, which does not detail quarterly profits, is the first company to report among major drug makers this quarter. Roche’s drugs business has so far been spared the pain from a wave of patent expirations ravaging rivals, as most of its top-selling medicines are biotech drugs consisting of proteins derived from living organisms, which are difficult to copy.

The Basel-based firm expects fullyear sales to grow in line with last year, when they rose 7%, and core earnings to rise ahead of revenue. It said it expected to further increase its dividend this year.

Some analysts have said Roche’s guidance is conservative and expect the advent of new expensive cancer drugs as well as the company’s pledge to keep a lid on research spending to drive double-digit core earnings this year.

Although its top-selling blood cancer drug, Rituxan, goes off patent in Europe at the end of this year, sales are expected to hold up as Roche does not anticipate competition from lower-cost copies known as “biosimilars” until early 2016.

Sales of Rituxan, which is sold as MabThera in Europe, rose 6% at constant exchange rates to Sf1.70bn in the first quarter, in line with analysts’ forecasts.

Sales of another big cancer drug, Avastin, rose 11% to Sf1.53bn, better than expected, as a result of increased use in both ovarian cancer and colorectal cancer.

Roche hopes follow-on drugs will help extend the shelf life of its current bestsellers, which also include breast cancer medicine Herceptin — a drug that it plans to use in combination with newer medicine Perjeta.

Perjeta, which won European approval last month after getting a nod from US health regulators last year, had sales of Sf50m in the first quarter.

Roche also has high hopes for a novel chemotherapy-carrying “armed” antibody called Kadcyla, which clinched US approval in February.

Investors are waiting for data due in early June on a compound known as GA101, which Roche is positioning as a follow-on to Rituxan. Reuters